Fri, Jul 26, 2019 - Page 12 News List

Odd-lot intraday trading approved with 2020 start

ACCESSIBILITY:Due to lower volumes, it would take 10 minutes to match an order, while securities houses would need to provide separate interfaces to avoid confusion

By Kao Shih-ching  /  Staff reporter

From the second half of next year, investors would be able to buy shares in quantities of less than 1,000 during regular trading hours, the Financial Supervisory Commission said yesterday.

The commission approved the Taiwan Securities Association’s proposal to implement odd-lot intraday trading, with more than 10 local brokerages expressing their willingness to handle the new service, Securities and Futures Bureau Deputy Director Sam Chang (張振山) told a news conference in Taipei.

Currently, odd-lot trades are only permitted in after-hours trading, with buyers and sellers placing orders from 1:40pm to 2:30pm and the call auction mechanism matching the orders once after 2:30pm, Chang said.

After odd-lot intraday trading is launched next year, buyers and sellers could place their orders from 9am to 1:30pm and the system would begin matching the orders at 9:10am, the same as standard-unit trading, Chang said.

As there would be fewer odd-lot trades, it would take the system 10 minutes to match orders, while it takes five seconds for the call auction mechanism to match standard-unit orders, he said.

The Taiwan Stock Exchange’s (TWSE) continuous trading system that it is to be implemented in March next year would be separate from odd-lot intraday trading, he said.

The commission supports odd-lot intraday trading, as it would make big-ticket stocks more affordable for individual investors, Chang said.

For example, a standard-lot purchase of smartphone camera lens maker Largan Precision Co (大立光) shares would cost more than NT$4 million (US$128,679) based on yesterday’s closing price of NT$4,365, beyond the reach of many individual investors, he said.

Although the volume of after-hours odd-lot trading made up only 0.1 to 0.3 percent of the TWSE’s total volume, the commission expects the number to increase after the system is launched next year, Chang said.

The average daily turnover of after-hours odd-lot trading totaled NT$85 million in 2016, but rose to NT$141 million in 2017 and NT$130 million last year, Chang said, adding that it averaged NT$126 million in the first six months of this year.

Local securities houses would be required to provide a separate transactional interface for odd-lot traders, so retail investors would not confuse the orders with trading in standard units, the commission said.

Odd-lot traders would also be asked to place orders online rather than calling stock brokers by telephone to enhance efficiency, it added.

The TAIEX yesterday rose 5.65 points, or 0.05 percent, to close at 10,941.41 on turnover of NT$132.87 billion, TWSE data showed.

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